Softbank announces a second AI-focused Vision Fund worth $108 billion with Microsoft, Apple as major investors

Softbank has announced a second Vision Fund with a focus on accelerating AI innovation. This second investment fund totalling $108 billion is backed by investors including Apple, Foxconn, Microsoft, and Standard Chartered Bank, to name a few. SoftBank Group’s own investment in the fund will be $38 billion. SoftBank Group is also said to be still in discussions with other participants with the total amount of the fund expected to increase.

The first Softbank vision fund of $97 billion fund was mainly backed by the governments of Saudi Arabia and Abu Dhabi and was used for investments in Uber, WeWork, Grab, Grofers, Paytm, and Oyo. Notably, the second Vision Fund does not currently include any participants from the Saudi Arabia government. Following the revealation of Saudi Arabia’s role in the murder of journalist Jamal Khashoggi, SoftBank received a lot of backlash for taking funding from Saudi Arabia. Speaking at a quarterly earnings call in early November 2018, Masayoshi Son, CEO of SoftBank, condemned Khashoggi’s murder, describing it as an “act against humanity and also journalism and free speech… a horrible and deeply regrettable act.” He said that the killing of Khashoggi could have an impact on the bank’s Vision Fund.

The Wall Street Journal reported earlier this week, citing unnamed sources, that Saudi Arabia and Abu Dhabi had indicated they were likely to invest again, but Riyadh’s funding would be less than $45 billion which was the amount invested in the first fund.

Also reported by WSJ, Microsoft being a major investor in this fund, SoftBank executives told Microsoft they would encourage the fund’s roughly 75 companies to shift from Amazon’s cloud platform to Microsoft’s. Quite an interesting way to capture the market!

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According to Financial Times, SoftBank said it had signed a memorandum of understanding (MoUs) to invest in the fund with an unnamed Taiwanese investor and seven Japanese financial groups including the top three banks — Mizuho, Sumitomo Mitsui Banking Corporation and MUFG Bank — as well as Dai-ichi Life Insurance and Daiwa Securities.

Read the official report here.